Recitation, as Required by CPLR Section 2219(A), of the Papers Considered in the Review of This Motion:Papers/NumberedNotice of Motion and Affirmation and Exhibits Annexed 1Answering Affirmation and Affidavit and Exhibits Annexed 2Replying Affirmation 3 UPON THE FOREGOING CITED PAPERS, THE DECISION/ORDER IN THIS MOTION IS AS FOLLOWS:1Petitioner commenced this nonpayment proceeding seeking $1,100.00/month as the legal rent for the subject rent stabilized apartment in a petition dated June 9, 2014. The proceeding was settled in a two attorney, so ordered, stipulation, dated April 16, 2015. Petitioner moves by notice of motion for an order vacating the April 15, 2015 stipulation (“the stipulation”), and respondent opposes the motion in all respects.It is undisputed that respondent Chanti Baker moved into the subject apartment with her partner, Mark Springer, and their two minor children, at the inception of the tenancy in 2014. Mr. Springer was the tenant of record, and listed on the DHCR registration with a legal rent of $1100/month. Jay Berman, as receiver, commenced this nonpayment proceeding in June 2014 against Springer, as tenant of record. On September 17, 2014, respondent Springer, pro se, signed a stipulation stating he owes $7,000 through September based on arrears of $1000/month for March through September 2014. The stipulation contained repairs to be done.Subsequently, there was a domestic violence incident, and Baker and Springer broke up. Respondent Baker got an order of protection against Springer excluding him from the apartment, and he has not returned. Respondent Baker continued residing in the apartment with their two minor children. Respondent Baker was added as a respondent in a two attorney stipulation after the tenant of record vacated.The DHCR issued a rent reduction order for the subject apartment in 1989 setting the legal rent at $278/month. Denyse Roberts, the prior owner who sold the building to petitioner in 2015, submitted an application to the DHCR to lift the rent reduction order, and that application was denied on August 25, 2014. The DHCR found that the conditions upon which the January 25, 1989 rent reduction order was issued have not been corrected. Petitioner purchased the building six months after the application to lift the rent reduction order was denied.Petitioner Avenue D Properties, LLC was substituted for the Receiver in the proceeding in the stipulation as Avenue D Properties, LLC purchased the building on February 4, 2015. Petitioner purchased the building from Denyse Roberts, the former owner whose application to lift the rent reduction order was denied six months prior to the sale of the premise to petitioner. The parties also consented to adding Chanti Baker as a party respondent in a two attorney stipulation dated June 22, 2015.On April 16, 2015, the parties entered the stipulation which set the legal rent at $1,000 in paragraph (3), and respondent Baker was given a “succession” lease in her name. There was no vacancy increase. Pursuant to the stipulation, respondent paid $18,507.00 at $1000/month, and the judgment and warrant were vacated in the November 13, 2015 stipulation. $13,000.00 of the arrears paid covered months that respondent did not have an independent obligation to pay rent, and prior to petitioner owning the building.Petitioner subsequently commenced a nonpayment proceeding in 2017 seeking monthly rent arrears at $1020/month.2 Respondent, represented by different counsel, moved to dismiss the petition based on documentary evidence, and a defective rent demand. Respondent submitted the DHCR records with the 1989 rent reduction order setting the rent at $278/month, and the 2014 denial of the owner’s application to lift the rent reduction order. Petitioner did not deny being aware of the rent reduction order, and it opposed the motion to dismiss stating respondent wanted to pay “…a paltry $278.00 a month while remaining the tenant of record.” Petitioner does not deny being aware of the rent reduction order, and had the opportunity to examine the DHCR records prior to purchasing the building and entering the stipulation at issue herein. The motion to dismiss in the 2017 proceeding was made pursuant to CPLR 3211(1) or (7) and RPAPL 711(2) as the rent demand failed to state a good faith approximation of the arrears. The motion to dismiss was granted based on a defective rent demand.Petitioner seeks to have the 2016 stipulation vacated in its entirety, and states it only gave respondent a lease because she agreed to set the legal rent at $1,000/month. Petitioner states that in view of the decision in the subsequent 2017 nonpayment proceeding, i.e., dismissing the petition based on a defective rent demand, petitioner states it only agreed to give respondent a lease because it was contingent on setting the legal rent at $1,000. There is no language in the two attorney stipulation reflecting a quid pro quo, or conditions to the lease.Petitioner relies on the holding in Riverside Syndicate, Inc. v. Munroe, 10 NY3d 18 (2008), which vacated the stipulation stating that the “…agreement to be within neither the letter nor the spirit of the law, because it was not a good bona fide settlement of the parties’ dispute.” Riverside Syndicate at 23. In Riverside Syndicate both parties participated in the fraud and the acts to evade the RSC. The court found the tenants agreed to pay an illegal rent, and the landlord agreed to let the tenants use the rent stabilized apartment as a second home. In this case, only the landlord knew about the rent reduction order setting the monthly rent at $278.Respondent relies on the holding in Jazilek v. Abart Holdings, LLC, 10 NY3d 943 (2008), which vacated a stipulation as void against public policy as it violated the RSC. The Court remanded the case to the Appellate Division for further proceedings. The Appellate Division held that the voiding of the parties’ so-ordered stipulation did not restore the parties to the status quo ante the stipulation. The court held, ” We reject defendant’s contention that since the Court of Appeals held the stipulation to be void, the parties should be restored to the status quo ante the stipulation, thus permitting defendant to pursue its claims against plaintiff as a holdover from an illegal sublet.” Jazilek v. Abart Holdings, LLC, 72 AD3d 529, 530 (1st Dept. 2010) Respondent states the illegal rent setting in the instant stipulation does not support vacating the entire agreement, or vacating the lease between the parties.DiscussionUpon a showing of good cause, stipulations of settlement may be set aside in order to prevent injustice. Matter of Frutiger, 29 NY2d 143 (1971) Good cause may be demonstrated if either party has “inadvertently, unadvisably, or improvidently entered into an agreement which will take the case out of the due and ordinary course of proceeding in the action, and in so doing may work to his prejudice.” Matter of Frutiger at 150. It is well settled that stipulations of settlement “are favored by the courts and are not lightly cast aside.” Hallock v. State of New York (64 NY2d 224, 230 (1984) The Court of Appeals in Hallock held that strict enforcement of “open court” stipulations “…not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process.” Hallock at 230However, “where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake, or accident,” id., “[t]he court’ possesses the discretionary power to relieve parties from the consequences of a stipulation effected during litigation upon such terms as it deems just and, if the circumstances warrant, it may exercise such power if it appears that the stipulation was entered into unadvisedly or that it would be inequitable to hold the parties to it.” Genesis Holding LLC v. Watson, 5 Misc 3d 127[A], (App Term, 1st Dept. 2004)Petitioner fails to allege mutual mistake, fraud, collusion, or accident to support its request to vacate the stipulation. The only fraud presented herein is by the petitioner, and permitting the landlord to benefit from its fraud, is not an equitable or just result. Petitioner knew the legal rent was $278/month, and efforts to lift the rent reduction order at the DHCR in 2015 was unsuccessful. Petitioner circumvented the DHCR order by entering the April 16, 2016 stipulation, one year later. The stipulation set the legal rent stabilized rent at $1,000/month. Petitioner argues the only reason it offered respondent a lease was because they were able to set the rent at $1000, in violation of the DHCR order. Petitioner now seeks to vacate the stipulation in its entirety because its scheme to evade the DHCR rent reduction order failed to work. Petitioner has a remedy at the DHCR to lift the rent reduction order. Respondent Baker had a succession defense to the subject apartment, and she was unaware of the rent reduction order, as was the court.There was no mutual mistake, nor was there a mutual scheme to circumvent the RSC, in this stipulation. “Where a mistake of fact is attributable to the negligence or carelessness of the party seeking to vacate a stipulation, and there has been no fraud or deceit on the part of the other party thereto, such a mistake will not constitute a basis to set aside the agreement. (See Da Silva v. Musso, 53 NY2d 543, 552 (1981); Lowe v. Steinman, 284 AD2d 506, 508 [2001].” Waterside v. Christian, 13 Misc 3d 138[A] (App Term, 2nd Dept, 2nd & 11th Jud Dists, 2006)Based on the foregoing, petitioner’s motion to vacate the April 2016 stipulation is denied in all respects. This constitutes the decision and order of the court.DATED: January 14, 2019
